Is Your Home at Risk? How Insurance Companies Decide Your Rates

Your homeowners insurance is an essential and often required investment that can play a key role in ongoing financial security and stability. However, purchasing home insurance may also represent a significant expense that cannot be taken lightly, especially during times of economic uncertainty. Understanding how your rates are determined and ways you might be able to make yourself and your home appear less risky can be valuable.

Key Factors for Home Insurance Quotes

As home insurance companies analyze your situation and calculate appropriate rates, they may consider a multitude of factors. Although exact criteria and the weight given to each can vary, you should generally expect the following to be considered:

• Location—Where you live plays a significant role in how risky carriers perceive insuring your home to be. Local weather patterns, crime rates, and cost of living can all influence your rates, as houses that are more likely to be damaged by natural disasters or burglarized are considered riskier and will likely incur higher costs.

• Structural specifications—Your home’s materials and other details are also an important consideration for carriers. For example, if you have a steel or fire-resistant roof, you may qualify for discounts. Additionally, updated plumbing and electrical systems may help reduce your premiums.

• Security features—Burglaries, vandalism and break-ins can incur expensive losses, meaning insurance companies may need to charge more to cover homes that lack ample security. Conversely, adding smart fire alarms, deadbolt locks and security systems to your property may garner savings.

• Liabilities—Home insurance policies often include personal liability coverage, meaning a greater perceived risk of being at fault for other parties’ losses, such as those of passersby and neighbors, could incur higher rates. If your home includes swimming pools and playground equipment or if you have a certain breed of dog, you may need to pay more.

We’re Here to Help

At Kite Insurance Agency in Columbus, Georgia, we can help you weigh your coverage options and find a homeowners insurance policy suitable to your needs at the best available rate. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.